How Long Does Bankruptcy Stay on a Credit Report?
Bankruptcy on a Credit Report
If you’re like most people, you’ve probably spent a great deal of your life working very hard in order to keep your credit score high. However, times don’t always favor us and if you find yourself filing for bankruptcy, there could be fears and doubts in your mind regarding your credit score. Of course, no one would like bankruptcy to reflect on their credit score as this can affect their ability to loan cars, homes, and more which is why getting in touch with a bankruptcy attorney is important.
To allow you to have a great sigh of relief, no, having bankruptcy doesn’t always entail massive damage. It always depends on several circumstances such as personal spending habits. There are also ways to help improve your credit score to maintain good standing in the coming days.
If you’re dealing with bankruptcy, be it chapter 7 bankruptcy or chapter 13 bankruptcy, know that you shouldn’t go through it alone. Enlist the help of a Skokie, IL bankruptcy attorney who can address your issues, review your case, and offer legal counsel to you on the best possible course of action.
Credit Score After Bankruptcy
You’ve probably considered filing for chapter 7 and/or chapter 13 bankruptcy. Apart from having your assets liquidated, you’re also probably worried about how these bankruptcies will affect your credit scores. Generally, creditors do not like seeing bankruptcy on a credit report however, the damage depends on your credit standing prior to filing.
More delinquent individuals with a high debt-to-asset ratio can expect their bad credit report after bankruptcy to be in the dumps. However, the moment you file for bankruptcy, the scores will lower but won’t go all the way. If you have good credit prior to filing for bankruptcy, then your score will take a big hit.
Does Bankruptcy Ruin Credit Score?
Having excellent credit scores can really be damaged by filing for bankruptcy. According to FICO, who performs credit-scoring, those with a good FICO score can expect a huge drop post-bankruptcy filing. One can monitor their credit score using companies such as Experian.
If you are dealing with bankruptcy or are looking to qualify, don’t make rash decisions. Get in touch with a Skokie, IL bankruptcy attorney to give you advice with inquiries on how to go about bankruptcy matters such as helping you check your credit report.
Chapter 7 vs. Chapter 13: Which is Better?
FICO, the most commonly-used scoring company, states that regardless of whether it’s a chapter 13 bankruptcy or chapter 7 bankruptcy has no impact or difference on your credit score, however, it is likely that a creditor that is viewing your credit report might prefer one bankruptcy over another.
Can Bankruptcy Help Improve a Credit Score?
Bankruptcy doesn’t provide a cure or remedy to your credit score, however it is the easiest way for some people. If you are lagging on debt payments or have collection accounts, bankruptcy provides you with a fresh start to get back on track instead of debt-related programs.
Bankruptcy helps cleanse you of many types of debt. Debt reduction helps you get your finances under control and then you can start paying loans and credits punctually.
However, if you don’t file for bankruptcy and continue with poor financial habits such as failing to pay your credit on time, debt defaults, improving your credit scores is impossible. When faced with doubt regarding your credit report after bankruptcy, get in touch with a bankruptcy attorney who can walk you through the process and ensure you get the best outcome possible.
Can I Still Get Loans After Bankruptcy?
Getting loans after bankruptcy depends entirely on what credit you are seeking.
- Credit Cards– Most bankruptcy filers are offered with credit cards after bankruptcy since card companies know you can’t file after several years. Beware that these have high-interest rates, charges, and other annual fees.
- Car Loans– Car loans are fairly easy to acquire but you could deal with subprime lenders with high-interest rates.
- Mortgages– the length of time it’ll take you before qualifying for mortgages varies depending on the circumstance. In some instances, you can be eligible for an FHA-insured mortgage before completing chapter 13 plans. Other factors can also affect your mortgage qualification such as debt load, income, and amount of down payment.
If you are going through bankruptcy issues and wonder how to get back on track, don’t handle the process alone. Talk to a Skokie, IL bankruptcy attorney who can help you with all matters related to bankruptcy, from chapter 7 and chapter 13 bankruptcy filing to improving your credit. Get in touch with a bankruptcy lawyer now.
How Long Will Bankruptcy Stay on My Credit?
Bankruptcy will appear on your credit report for up to a decade for both chapter 7 and chapter 13 bankruptcies. Applying for a loan or life insurance policy for more than half a million or applying for a job with an annual income of around $75,000.
Can I Improve Credit Report After Bankruptcy?
One may think that bankruptcy is the end of credit scores, but there is a way to improve your credit report after bankruptcy. Though repair takes ten years, rebuilding your credit can start immediately. There are certain factors scoring companies take into consideration when computing scores.
- Payment History
- Outstanding Debt
- Credit History Length
- How Much Credit You’ve Applied
One can start improving their credit report after bankruptcy by paying all their dues on time, keeping their debt load low and once ready, getting a credit card and paying off the full bill every month.
Contact Our Trusted Illinois Bankruptcy Attorney
Bankruptcy is something most people don’t want to discuss or even think about. It gives us the image that we are losing everything we have. Rather, it draws our attention to how it can negatively impact credit scores. If you are worried about your credit scores, know that there is always something you can do to improve your credit scores and eventually rebuild them in order to start anew.
Cultivating good financial habits such as paying on time and keeping debt low are great starters. Likewise, if you are having trouble handling bankruptcy and credit-related matters, know that it is best to reach out to a bankruptcy attorney from Cutler & Associates. A bankruptcy attorney can review your case and lead you to the best outcome possible. Schedule an appointment now.